Thursday, 27 September 2007

HR consulting: challenges and opportunities

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I went to the 7th Annual Consultants Forum today to see Fiona Czerniawska, Director of the Management Consultancies Association's think tank and author of ‘State of the Consulting Nation’ talk about the UK’s consulting marketplace.
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The UK's consulting market is worth about £7.7bn and grew by about 16% last year. This is likely to fall off over the next year following the turbulence in the exchange markets. HR consulting is worth about £710m which has been growing at a higher 22%. However, this is likely to fall more quickly than some other areas, since, as we all know, HR is often seen as discretionary spending.
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The general theme of the presentation seemed to be growing diversity in consulting provision, particularly with engineering companies such as Mott MacDonald, Arup and Atkins playing a growing role in project / programme management consulting. Even the titles of management consultants is changing, with the audit led firms growing teams of Business Advisers and the Institute of Management Consultancy rebranding as the Institute of Business Consulting. Apparently, McKinsey have even been thinking about changing the name of their consultants to 'knowledge purveyors'.
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One of the factors behind this has been a shift towards using consultants to provide specific skills that clients don't have in house (rather than clients' choice being anything about firm's methodologies or approach). And associated with this is a small change of about 4% of the HR consulting market moving from the big all purpose firms like IBM and Accenture (the MCA's type C - which still have 49% of this market) to specialist HR consulting firms (type M - at 20%).
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I think this is a very positive trend - for clients to ensure they maximise the value of their consulting spend, and for consulting firms, as it encourages consultants to focus on their strengths, and therefore to optimise their expertise and potential.
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